A Cairn India official, when contacted on the issue, said: ���The Centre has now allowed private refiners to qualify as additional buyers of this Rajasthan crude. Negotiations for price and quantity with Essar and RIL are currently on.���

It was earlier reported that RIL wants to buy about 30,000 to 60,000 barrels per day (1.5-3 million tonne) of crude from Cairn���s Rajasthan fields for its two refineries at Jamnagar in Gujarat. Essar Oil has also expressed interest in buying 30,000 bpd this year and 120,000 bpd (six mt) by 2011 when it expands its Vadinar refinery.

It is for the first time that crude oil from a domestic field will be sold to a private refiner. So far, all the crude oil that is produced in India is consumed by PSU refiners. Till now, the company, which began production from its Rajasthan fields in August-end, could sell the crude oil only to state-run companies ��� Indian Oil Corp (IOC), Hindustan Petroleum (HPCL) and Mangalore Refinery and Petrochemicals (MRPL).

The designated public sector refiners will lift only about 50% of the total estimated production of Cairn India���s estimated crude production. They include HPCL, which has decided to lift about 0.3 mt of crude in 2009-10 and another 0.5 mt in 2010-11. IOC, on the other hand, said it will consume 0.2 mt and 1.5 mt in 2009-10 and 2010-11, respectively.

The company, which ramped up its production to about 10,000 bpd oil from Rajasthan, is planning to reach its optimum level of 30,000 bpd (1.5 mt) by the end of the year, the company said. Rajasthan is the largest onland oilfield discovered in more than two decades and will have a peak output of 8.75 mt, contributing more than one-fifth of the nation���s current oil production.

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